At a conference in Washington
September 13 Treasury's Michael Doran said the loan prohibitions of recently
enacted corporate reform legislation won't affect IRS guidance on the loan
treatment of certain split-dollar arrangements.

During a panel discussion on the proposed split-dollar life insurance
regulations (REG-164754-01) at ALI-ABA's annual Retirement, Deferred
Compensation, and Welfare Plans of Tax-Exempt and Governmental Employers
Conference, Doran, assistant Treasury benefits tax counsel, said it is unlikely
that the existence of the Sarbanes- Oxley law (P.L. 107-204) will have any
effect on the IRS's approach to split-dollar arrangements. (For the full text
of REG-164754-01, see Doc 2002-16108 (24 original pages) [PDF]
or 2002 TNT 135-10 .)

Whether the new law applies to split-dollar arrangements is a question for
the Securities and Exchange Commission because the SEC has jurisdiction to
interpret the language, Doran said.

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At a conference in Washington
September 13 Treasury's Michael Doran said the loan prohibitions of recently
enacted corporate reform legislation won't affect IRS guidance on the loan
treatment of certain split-dollar arrangements.

During a panel discussion on the proposed split-dollar life insurance
regulations (REG-164754-01) at ALI-ABA's annual Retirement, Deferred
Compensation, and Welfare Plans of Tax-Exempt and Governmental Employers
Conference, Doran, assistant Treasury benefits tax counsel, said it is unlikely
that the existence of the Sarbanes- Oxley law (P.L. 107-204) will have any
effect on the IRS's approach to split-dollar arrangements. (For the full text
of REG-164754-01, see Doc 2002-16108 (24 original pages) [PDF]
or 2002 TNT 135-10 .)

Whether the new law applies to split-dollar arrangements is a question for
the Securities and Exchange Commission because the SEC has jurisdiction to
interpret the language, Doran said.

Treasury has no formal rules of interpreting the legislation, but "what
we do have is a half-century of thinking on whether split- dollar arrangements
are treated as loans," he said.

Doran said he had no idea of how the SEC is going to come out on the issue
but noted that Treasury has made a distinction between employer- and
employee-owned arrangements in determining loan treatment -- a distinction he
said is intended to result in a fair measure of tax for those arrangements.

On the other hand the new law takes an "all or nothing" approach
with loan arrangements -- it's criminal or not criminal, he said. Considering
the new law's approach, Doran said it is reasonable to ask if it can really be
the case that if one puts the employer's name down as the owner of a
split-dollar policy it won't be a crime, but if the employee's name is listed
as owner it will be a crime.

"I question whether the SEC will form a distinction like we have in the
regs," Doran said.